The UK-based developer Luminous Energy says it has agreed to sell the 162MW Columboola Solar Farm in Queensland to South Korean financial giant Hana Financial Investment after signing a deal for a long term power purchase agreement with the state government owned utility CS Energy.
The deal announced on Friday means that CS Energy will buy all of the output of Columboola, located near Miles in the Western Downs region, on a long term contract. Its clients include Griffith University, Central Queensland University and Queensland University of Technology.
CS Energy – which owns the Kogan Creek and Callide coal fired generators – last week signed an off take deal to take surplus energy from the newly completed 64MW Warwick solar farm, owned by the University of Queensland, and it also has an off take agreement with the Kennedy Energy Park, but that project has been stalled by connection problems.
The PPA with Columboola is the fourth significant off take agreement by a Queensland government owned utility in recent months, which will lead to potentially 2.5GW of large scale wind, solar and storage projects, a major step forward for the state’s 50 per cent renewable energy target as it heads towards an election in late October.
The newly formed CleanCo has signed a deal with Acciona that will lead to the construction of the 1GW Macintyre wind project, and has also signed an off take agreement with the 400MW Western Downs solar farm with Neoen, the largest solar project in the country.
This week, Stanwell Corp announced a PPA for 450MW of output from Goldwind’s Clarkes Creek wind farm, part of plans to build a 1GW wind, solar and battery hub near Gladstone. Stanwell and CS Energy operate most of the coal and gas generators in the state.
The Columboola Solar Farm – rated at 203MW (DC) and 162MW (AC) is Luminous Energy’s largest project to date and its first in Australia. Luminous says it will use Columboola as a springboard to consolidate growth in its existing markets as well as entering new ones.
Luminous says it has now initiated 1.2GW of new solar and storage projects across the UK, US, Australia and Chile, with a combined market value of $A1.6 billion. It says it has some other smaller solar projects in the early stages of development in Australia.
“Australia is a major market in the global solar revolution and the country’s solar industry has huge potential,” Luminous Energy CEO Jolyon Orchard said in a statement. “It supports our vision to accelerate the growth of the global solar industry by generating low cost, reliable electricity while respecting the natural environment.”
“We’ve been working on the project for the best part of four years,” Orchard told RenewEconomy from London. “It’s a fantastic outcome for everyone involved … and the quality of the counterpart is what attracted HFI to the table.”
Orchard said he was aware of the construction, connection and commissioning that have affected numerous projects in Australia (he is a regular reader of RenewEconomy). “We have done a lot of work with (transmission company) Powerlink, and we are connecting in a strong part of the network.”
He said the prospect of a stable MLF (marginal loss factor) and the low risk of curtailment made it an attractive asset for HFI, the third biggest financial institution in South Korea, which has previously invested in renewable energy projects, including three Finland wind farms.
HFI first flagged its interest in Columboola in May, and saw it an an opportunity to help Korean manufacturers of equipment including transformers advance into Australia.
State energy minister Anthony Lytham said there were now 41 large scale wind and solar projects built or committed in the state, and the creation of a new renewable energy zone in South-West Queensland meant Columboola would be followed by other projects and jobs.
CS Energy CEO Andrew Bills said the company was responding to the needs of large energy users like the universities by developing tailored solutions that met their needs in terms of energy usage, decarbonisation and energy management.
Orchard also paid credit to PWC, which advised on the deal and provided advice across a broad range of services, including legal, equity, debt, tax, financial modelling and due diligence and enabled a suite of bankable documents that supported the sale of the project.
Construction of the solar farm will commence soon and it will be built by India-based contractor Sterling and Wilson and is due to be complete late next year. Sterling and Wilson also landed the contract for the Western Downs solar project. The new solar farm will feature bi-facial solar panels, and single axis tracking system and is expected to produce 450 gigawatt hours a year.